The year is 2004. I am working on a new campaign for the struggling A&W brand. Sales haven’t been good for a while due to a variety of factors from operations to supply chain, so naturally everyone at the business is questioning marketing. My team is therefore tasked with finding a new brand direction … or else. Happily, HQ has been working on a new theme befitting the brand’s pioneering status and are ready with a recommendation—Nostalgia. “50’s America is where we need to go,” they tell us, “classic cars, babes, Elvis, juke boxes and checkered table cloths.”

Trouble is, I am sitting in Riyadh, and sharing these mood boards with my Saudi colleagues has resulted only in empty stares. Try as I might, I am just not able to create the pangs they must feel for a bygone joyful youth, and not just because most were born two or three decades after that time.

Stubbornly I put these to test in consumer focus groups, because HQ.

What we hear in those groups is surprising. Nostalgia is very much relevant to Saudis, and QSRs are a big part of it, just not in 50s American sense. Group participants glowingly recall growing up with American chains like Pizza Hut, KFC, Hardees, and Wimpy. These have been gathering places for their weekend family outings, their birthday parties, their school hangouts, and even their graduation and wedding dinners. A week without a visit to, or delivery from an American brand is unthinkable.

The love is real.

Now today, two decades on.

A simple romantic tale has developed into a full-fledged love triangle—fast-food loving customer at one end, American QSRs at another, and a new entrant, local Saudi chains, at the third.

According to Mingora’s Food Panel 2024 data of top 30 KSA QSRs, Saudi brands outnumber American by 15 to 13. Outside of the top 30, local brands dominate the SAR 66.6bn (USD 17.7bn) Saudi fast-food market.

Back in 2004, only 5 or 6 Saudi chains would show up in top 30. Large Saudi chains such as Maestro Pizza, Burgerizzr, Shawarmer and Sultan Delight Burger either didn’t even exit at that time or had barely a few stores.

This pattern is set to continue as well.

Many top American chains are facing consistently declining sales and customer churn. They are beset with lower customer satisfaction scores when compared with category averages on food, value, service, and atmosphere attributes (Mingora Food Panel KSA 2024). In addition, some American brands are disproportionately facing consumer boycott arising out of the Gaza siege (Circana-Mingora SalesTrack 2024).

So have Saudis fallen out of love with American QSR?

Like all good love stories, the answer is a resounding maybe.

For starters, the 13 American brands in “Saudi top 30” list post a combined revenue of over 6 billion Riyals ($1.7 billion U.S.) annually, 10 percent higher than their Saudi counterparts in the list. Top 5 American chains also have over $100 million in revenues and 140-plus stores. The biggest chain in Saudi Arabia, McDonald’s, is as American as their famed apple pie. It is 30 percent bigger than the next biggest chain in the category, has the highest number of stores (410-plus), the fastest development rate and highest consumer satisfaction scores amongst all QSR.

Some other traditional U.S. chains such as Dominos, Subway, and KFC have also been posting creditable revenues and store builds. Another U.S. chain, Wendy’s, has made a second re-entry into the Saudi market to a high degree of acceptance from consumers.

The trouble many U.S. brands are facing in Saudi Arabia is this: whereas in the past the “American” moniker had almost been a guarantee of brand success especially in the absence of local and international competition, this is no longer the case. If anything, the affinity toward local brands is higher than ever before as Mingora’s Feb-24 Confidence Survey indicates.

Overwhelmingly, the battleground in Saudi QSR sector is “proposition”—brands with the best propositions win, regardless of origin. On that count, many American chains have to compete harder than ever before with local, entrenched alternatives, be it QSR chicken, burger, pizza or sandwiches. For every Burger King or Hardee’s, there is a Herfy, a Burgerizzr or a Sultan Delight Burger. For every Pizza Hut and Little Caesar’s, there is a Maestro. For every Popeyes and Texas Chicken, there is an Albaik or an Al Tazaj.  For every Subway, there is a Kudu. This is not counting hundreds of flashy new entrants, some hitting big such as Sign Burger, I’m Hungry and others.

It is the same case in other segments too, such as casual dining and coffee.

Why have many American chains become uncompetitive?

A starting point is to look at their home market performance. If a chain has been struggling in the U.S., there is high likelihood it will have a hard time in most of its international markets. Many U.S. brands have gone through significant tough times in U.S. market in the last decade or so, with multiple overhauls. When that happens, international business suffers disproportionately due to lack of focus, resources and even brand clarity.

Food, which distinguished these chains in the past, is also a reason for their current struggles. Saudi consumers no longer accept freezer-to-frier patties, ketchup and mayo on top, at high prices when better tasting, fresher local alternatives abound. Theirs is a massively entrepreneurial society. Every other day, there is a new local brand in town offering a higher quality version of traditional QSR food, complete with a twist of local flavors. Large Saudi chains such as Al Baik, Kudu and Shawarmer are also consistently innovating with a higher success rate than many international chains.

International brands disproportionately depend on their local franchisees to run great restaurants. This involves consistent heavy investments in people, assets and marketing to stay ahead of competition. Struggling American chains have either made 2 or 3 franchisee changes already in the last few years, or are at breakdown levels with their franchisees due to conflicting priorities. This means their operations, pace of development, supply chains, digitization and marketing efforts are unable to keep pace. Sorting these issues out, while sitting far away, takes patience and doesn’t always work.

Saudi society is in the grip of unprecedented social, cultural and economic change, probably unmatched in any country since the fall of the Iron Curtain. It is a young, highly digitally savvy, globally aware country with discerning tastes. Many international HQs, sitting thousands of miles away, cannot fathom the scale of change taking place in the country. Old ways of doing business just do not apply.

The only way to rekindle the love is to become desirable again.

Epilogue: A&W closed down in Saudi Arabia around 2006. The chemistry just didn’t happen.

Muhammad Ali Syed is the founder and CEO of Mingora Technologies based out of London and UAE. Mingora is the Chief Data Officer of Foodservice sector in EMEA region. It works with leading restaurant, retail, foodservice, real estate, strategy consulting and private equity groups in restaurant space. Ali is former Head of Marketing for Fortune 250 Restaurant Brands such as KFC and Pizza Hut at Yum! MENA, Long John Silver’s at Yum! US and Wendy’s Asia-Pacific and EMEA. He can be reached at muhammad.ali@mingora.org.